A traveling production of

Fiddler on the RoofFiddler on the Roof

performs each year. The average show sells

1 comma 6001,600

tickets at

$ 50$50

per ticket. There are

125125

shows each year. The show has a cast of

6060,

each earning an average of

$ 320$320

per show. The cast is paid only after each show. The other variable expense is program printing costs of

$ 9$9

per guest. Annual fixed expenses total

$ 1 comma 763 comma 200$1,763,200.

Read the requirements

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.

Requirement 1. Compute revenue and variable expenses for each show.

The revenue for each show is $

.

The variable expenses for each show are $

.

Requirement 2. Use the income statement equation approach to compute the number of shows needed annually to breakeven.

Begin by determining the basic income statement equation.

-

-

=

Operating income

Using the basic income statement equation you determined above, solve for the number of shows to breakeven.

The number of shows needed annually to break even is

.

Requirement 3. Use the shortcut unit contribution margin approach to compute the number of shows needed annually to earn a profit of

$ 2 comma 644 comma 800$2,644,800

Is this goalrealistic? Give your reason.

Begin by selecting the formula.

(

+

) /

=

Target # of shows

Using the equation you determined above, solve for the target number of shows.

The number of shows needed annually to earn a profit of $2,644,800 is

.

The profit goal of

$ 2 comma 644 comma 800$2,644,800

is

realistic

unrealistic

since

Fiddler on the RoofFiddler on the Roof

currently performs

125125

shows a year.Requirement 4. Prepare

Fiddler on the RoofFiddler on the Roof's

contribution margin income statement for

125125

shows each year. Report only two categories of expenses: variable and fixed.

Fiddler on the Roof

Contribution Margin Income Statement

Year Ended December 31

1.	Compute revenue and variable expenses for each show.
2.	Use the income statement equation approach to compute the number of shows needed annually to breakeven.
3.	Use the shortcut unit contribution margin approach to compute the number of shows needed annually to earn a profit of $ 2 comma 644 comma 800$2,644,800 Is this goal realistic? Give your reason.
4.	Prepare Fiddler on the RoofFiddler on the Roof's contribution margin income statement for 125125 shows each year. Report only two categories of expenses: variable and fixed.

PrintDone